Kansas City Southern sets pricing in tender for 7½% notes

By Jennifer Chiou

New York, Jan. 29 - Kansas City Southern announced pricing for the tender offer for its $200 million of 7½% senior notes due 2009.

For each $1,000 principal amount, the company said it will pay $1,025.21, which was determined using the bid-side price on the 4% Treasury due June 15, 2009 as of 2 p.m. ET on Jan. 28 plus 50 basis points, minus accrued interest. The total consideration includes a consent payment of $20.00 for those who tender by the early deadline.

The reference yield and the tender offer yield are 0.3% and 0.8%, respectively.

Kansas City Southern will also pay accrued interest to the settlement date.

As of the early deadline, holders had tendered $176.6 million, or 88.3%, of the notes.

The company sought consents from a majority of holders to amend the notes.

Kansas City Southern announced Jan. 14 that its wholly owned subsidiary, Kansas Southern Railway Co., began a cash tender offer and consent solicitation for its 7½% notes.

The consent deadline was 5 p.m. ET on Jan. 28, and the tender will end at midnight ET on Feb. 11.

The company previously said it executed a supplemental indenture amending the notes.

Banc of America Securities LLC is the dealer manager and solicitation agent (888 292-0070 or 704 388-9217). D.F. King & Co., Inc. is the information agent (800 659-5550 or call collect 212 269-5550).

Based in Kansas City, Mo., the transportation holding company has railroad investments in the United States, Mexico and Panama.

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